Site Selection Policy: Four State Issues That Will Shape Location Decisions Through 2035

Why Corporate Leaders Should Pay Attention to Policy, Not Politics

When companies evaluate locations for a new facility, expansion, data center, headquarters, or manufacturing operation, most of the attention goes to labor costs, taxes, infrastructure, and available incentives. Yet every one of those factors is shaped by something more fundamental: public policy, and specifically site selection policy at the state and local level.

Workforce availability, energy reliability, housing affordability, permitting timelines, infrastructure capacity, and incentive programs do not develop in a vacuum. They result from decisions made by state legislatures, regulatory agencies, utility commissions, and local governments.

As states compete for investment and jobs, four site selection policy issues are emerging as critical differentiators:

• Artificial intelligence
• Energy access
• Housing supply
• Rural population retention and growth

The regions that address these challenges effectively are likely to attract a disproportionate share of investment over the next decade.

Artificial Intelligence: The Next Competitive Battleground

Artificial intelligence is quickly becoming both an economic opportunity and a policy challenge.

States are taking different approaches to AI governance and deployment. Ohio, Indiana, and Kentucky are each pursuing their own framework for managing artificial intelligence, workforce impacts, and government oversight.

For companies, the implications extend far beyond technology. AI influences:

• Workforce needs
• Data center investment
• Electricity demand
• Talent attraction
• Regulatory compliance

Communities that set clear regulatory expectations while supporting innovation and workforce transition will likely create more attractive environments for investment. For site selectors, regulatory clarity may become just as important as tax incentives.

Energy Access Is a Site Selection Constraint

For years, workforce was often cited as the most important site selection factor. Today, energy belongs in the same conversation.

Data centers, advanced manufacturing, AI infrastructure, and electrification initiatives are creating unprecedented demand for power. At the same time, transmission constraints, aging infrastructure, and permitting challenges are affecting how quickly new capacity can be delivered.

Energy decisions influence:

• Operating costs
• Reliability
• Project timelines
• Facility scalability
• Long-term competitiveness

This matters most for energy-intensive users whose operations depend on abundant, affordable power.

Housing Is Economic Development Infrastructure

Housing is one of the most underestimated factors in economic competitiveness.

Employees cannot relocate to a community where housing is unavailable or unaffordable. Employers cannot recruit successfully if workers cannot find places to live. And communities cannot sustain growth if housing supply lags demand. Increasingly, housing is a business issue.

Organizations evaluating locations should pay attention to:

• Housing availability
• Permitting processes
• Development policies
• Infrastructure investments that support growth

The regions that align housing policy with economic development goals may enjoy significant workforce advantages in the years ahead.

Rural Population Loss May Create Unexpected Competitive Challenges

Population trends are often overlooked during location analysis, yet demographic changes carry long-term consequences.

Many rural communities across the Midwest face ongoing population decline as younger residents move toward metropolitan areas for education, employment, and lifestyle opportunities. Population decline can affect:

• Labor force availability
• Tax base growth
• Public services
• Infrastructure investment
• Economic vitality

The most successful regions will be those that retain and attract residents while creating opportunities that support long-term population growth.

Why Site Selection Policy Matters for Long-Term Project Success

These four policy areas are interconnected:

• AI drives energy demand.
• Energy availability influences data center and manufacturing investment.
• Housing availability affects workforce growth.
• Population trends shape labor markets and infrastructure needs.

Together, they influence site competitiveness, workforce sustainability, incentive effectiveness, operating costs, and long-term project success.

This is why sophisticated site selection is no longer about finding the lowest-cost location. It is about identifying locations positioned to remain competitive over the life of the investment.

Every major investment decision is ultimately affected by public policy. The companies that gain an advantage are often those that understand not only where conditions are favorable today, but where policy is building a foundation for future growth.

Artificial intelligence. Energy. Housing. Population. These are not simply policy discussions. They are site selection variables, and increasingly, they may determine which regions capture the next decade of investment.

Let’s Talk About Your Next Project

Whether you’re evaluating a manufacturing facility, data center, distribution center, headquarters operation, or capital investment, understanding how policy decisions influence workforce, energy, housing, and incentives can significantly affect project outcomes.

At Ashmore Consulting, we help organizations identify locations positioned for long-term success, quantify incentive opportunities, evaluate risks, and negotiate packages that improve project economics and enhance competitiveness.

The best site selection decisions are not based solely on today’s conditions. They are based on understanding the trends that will shape tomorrow’s opportunities.

The information contained herein is general in nature and is not intended and should not be construed as legal, accounting, or tax advice or opinion provided by Ashmore Consulting LLC to the reader. The reader is also cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact Ashmore Consulting LLC or another tax professional prior to taking any action based upon this information. Ashmore Consulting LLC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.